Cypress Semiconductor Corporation (CY - Free Report) is currently one of the top-performing stocks in the technology sector, and an increase in share price and strong fundamentals signal its bull run. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
The company has performed extremely well in the past few months and has the potential to carry on the momentum in the near term as well.
Why an Attractive Pick?
Share Price Appreciation:A glimpse of its price trend shows that the stock has had an impressive run on the bourses over the past year. Cypress has returned 23.6%, comparing favorably with the industry’s 18.3% rally.
Solid Rank & Value Score:Cypress currently carries a Zacks Rank #1 (Strong Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: For the current year, 8 estimates have moved north over the past 60 days against no southward revision, reflecting analysts’ confidence in the stock. Over the same period, the Zacks Consensus Estimate for the current year has increased 8%. Also, for 2019, the Zacks Consensus Estimate has inched up 5% over the same time frame to $1.48.
Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings of $1.34 reflects year-over-year growth of 50.6%. Moreover, earnings are expected to grow 10.36% in 2019. The stock has a long-term expected earnings per share growth rate of 16.1%.
Growth Drivers: The company’s proper execution of Cypress’ 3.0 strategy, which is focused on delivering embedded solutions for automotive and industrial customers of all sizes, will continue to drive its performance.
To strengthen its presence in the industrial and automotive markets, Cypress deepened its focus toward enhancement of wireless connectivity solutions. Recently, Cypress partnered with Semtech to co-develop a two-chip LoRaWAN-based module for smart city applications. Further, Cypress acquired a customer named Pioneer for its automotive-grade Wi-Fi and Bluetooth combo solutions.
The company’s robust product portfolio will continue to aid management in strategically delivering strong performance. Its NOR Flash product portfolio has also been gaining momentum. Also, Cypress’ USB-C product continues to witness rapid penetration. Its customer base has grown significantly over the past few years. Considering the growth opportunities of USB-C, the company recently unveiled 7-port USB-C hub controller for notebook and tablet docking stations, and monitor docks.
We believe that Cypress is in a great position to grow sustainably and profitably based on its strong pipeline of innovative products, supported by expanding opportunities in the wireless market.
Other Stocks to Consider
Other top-ranked stocks in the same industry include Infineon Technologies AG (IFNNY - Free Report) , ON Semiconductor Corporation (ON - Free Report) and Rambus Inc. (RMBS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Infineon Technologies, ON Semiconductor and Rambus is currently projected to be 7.5%, 13.2% and 10%, respectively.
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